Japanese co buys 22pc stake of Summit Power

Japan's JERA Co has acquired a 22 per cent stake in Summit Power International for $330 million, the companies said on Monday, to enable the establishment of major energy infrastructure projects in Bangladesh, reports Reuters.
That means Summit Power International's total equity value is $1.5 billion.
The new investment was made in accordance with the memorandum of understanding on the development of energy infrastructure projects in Bangladesh that was concluded between JERA and Summit Power in May in Tokyo, JERA said in a statement on Monday.
Singapore-based Summit Power International is the holding company for all power assets of Bangladesh's Summit Group, while JERA is a joint venture between Tokyo Electric Power and Chubu Electric Power Co.
International Finance Corp (IFC), IFC Emerging Asia Fund, and United Arab Emirates-based EMA Power Investment, which were shareholders of Summit since 2016, will exit through this transaction, according to the statement. However, IFC will continue to be a large lender to Summit, it added.
The partnership will support Summit Group's investment plan of $3.0 billion by 2022 in Bangladesh, Muhammed Aziz Khan, Summit Group's chairman said in the statement.
Summit Power, the largest independent power producer in the country, owns and operates power generation facilities that produce approximately about 12 per cent of the country's capacity.
The company is currently constructing power generation facilities with a capacity of approximately 590 megawatts and, with several new projects also being planned, significant growth is expected in the future.
Bangladesh currently has a capacity to produce 18,000 megawatts of electricity per day, said Nasrul Hamid, the country's junior minister of power, energy and mineral resources, adding that it aims to increase it to 24,000 megawatts per day by 2021.
"Foreign investment is required to achieve this goal."
JERA said in a separate statement that it has positioned Bangladesh as a priority country for investment due to an expected rapid rise in electricity demand along with steady economic growth in the South Asian country.
"By capitalizing on the strong business foundation established through JERA's investment in Summit Power ... JERA will strive to explore business opportunities in the country and further expand its earnings base," the company added.
According to a report of the bdnews24.com, JERA plans to send executives and employees to Summit Power.
As a Summit Power shareholder, JERA will strive to increase the company's corporate value through the efficient construction and operation of its power generation facilities, thereby contributing to Bangladesh's sustainable economic growth.
In September, JERA agreed to acquire stakes in a gas-based combined cycle power project in Bangladesh now under development by Reliance Power.
Under the agreement, signed with India's Reliance Power, it will acquire 49 per cent of the project with combined capacity of 750MW.
The project will be set up in Narayanganj's Meghnaghat, 40km southeast of Dhaka. The project will be set up within 36 months of signing the agreements.